It's official: Windows 7 is a hit, and XP is finally in decline

Want more charts? See my follow-up post, When will XP finally fade away? And be sure to vote in the poll.

Last year at this time, Microsoft was in the final stages of preparing Windows 7 for its worldwide launch. The new OS was finally available to the public—well, at least that segment of the public with a TechNet or MSDN subscription. Those early adopters had to wait a few weeks after the official release to manufacturing date but still got a head start on the general public.

Those demanding and skeptical Windows users have now had a full year to stress-test Windows 7 and decide whether it's good enough to replace Windows XP.

The verdict? Windows 7 has been a quiet success, maybe even a phenomenon. Last spring, a Microsoft executive told me that the company had sold 100 million Windows 7 licenses. As part of its quarterly earnings call in July, Microsoft announced that that number had risen to 175 million, and the company has projected that a total of 350 million Windows 7 licenses will have been sold by the end of this year. That's a run rate of roughly 30 million copies per month worldwide, and it represents a lot of Windows 7-powered PCs.

Despite the big numbers, Microsoft has been almost eerily silent about its success. I didn't hear a lot of bragging in advance of the Windows 7 launch, nor has there been much chest-thumping since.

The competition has been muted as well. When was the last time you saw one of Apple's infamous "Get a Mac" ads? Hint: the last three ads in Apple's campaign were released on October 23, 2009, the day after Windows 7 was launched to the public. With titles like Broken Promises and PC News, Apple's marketing executives were hoping for a Vista-style wave of complaints, but they were as disappointed as Windows 7 upgraders were relieved. And then John Hodgman and Justin Long went off to spend more time with their families.

Meanwhile, Windows 7 keeps selling and XP usage is dropping. That's certainly true at this site, where Windows 7 visitors now outnumber those using Windows XP and Vista usage has plunged in the past year. Here's a graphic representation of how Windows 7 usage has increased among visitors to this site since its first beta release back in January 2009.

Data source: Google Analytics data for all pages at Ed Bott's Microsoft Report. Samples cover 30-day periods ending in December 2008, August 2009, December 2009, and August 2010. Each sample consists of a minimum of 100,000 unique visitors. I asked ZDNet's editors to check sitewide stats for me. They report similar trends. Windows 7 usage increased from 22.2% in December 2009 (exactly the same as Windows Vista) to 35.6% in August 2010. Over the same period of time, XP usage among ZDNet visitors fell below the 50% mark, dropping 7 points to 46.6%. At that rate, Windows 7 will surpass XP among all ZDNet visitors well before the end of this year.

Vista users were clearly eager to upgrade, judging by these results, even to a beta release of Windows 7. But XP users are also converting at a steady clip, with XP diehards now under the 40% level here. These numbers include only Windows users, but I also found interesting results when I looked at the percentage of visitors using Mac OS X. As of this month, that number has returned to its December 2008 levels (slightly over 5%) after peaking above 8% a year ago this month, just before the launch of Windows 7.

So what's really going on? You can summarize the entire story in one simple sentence: Windows 7 is the anti-Vista. Reviews have been overwhelmingly positive. Every couple of months, some blogger or reporter tries to stir up a Windows 7-related controversy (remember the "Black Screen of Death" scare stories?), but nothing seems to stick. Most of the obvious annoyances of Vista are fixed—especially the misunderstood User Account Control feature—and there hasn't been a scandalous security or privacy issue or a killer bug. Word of mouth has been solid, too.

In fact, it's good enough to finally dislodge XP's stranglehold on corporate computing. Not overnight, but certainly by XP's end-of-life date in April 2014.

That's the conclusion I draw from a review of data covering Windows 7 adoption rates in corporations, which are notoriously conservative when it comes to OS upgrades. Although the rates of adoption are far slower than among consumers, there's evidence to suggest that corporations are migrating to Windows 7 at a much faster pace than they did for either XP in 2002-2003 or Vista in 2007-2008. According to a Forrester Research study, Windows 7 was "already powering approximately 7.4% of corporate PCs" in April 2010, six months after its release. Although that number might sound small, it represents about a 1.25% increase in Windows 7 usage per month—an impressive number considering how slowly most corporations move. It's also more than twice the adoption rate of Windows Vista at the same point in its release cycle (Vista usage in enterprises topped off at 12.6% after three years), and it's 50% greater than Windows XP after a similar period.

As Forrester analyst Benjamin Gray explained:

[M]ost mainstream enterprises typically don’t embrace a new desktop OS until 12 to 18 months after its release […] We likely won’t see mainstream enterprisewide adoption of Windows 7 until the middle of this year as IT managers continue developing their upgrade strategies, testing and remediating their application portfolios, and determining what role, if any, client virtualization will play in their next-generation computing strategies.

Today, roughly 70-75% of corporate desktops are still running Windows XP. If enterprise adoption rates for Windows 7 continue at the seemingly slow pace of 1.5% per month, Windows 7 will probably overtake XP in corporate installations by the end of 2011. If that rate picks up even slightly, as it appears to be doing, then there's a good chance that XP will hold a single-digit share of corporate desktops when it's officially retired in 2014.

Last year around this time, I looked at some bullish projections of Windows 7 adoption rates. One was from IDC analyst Al Gillen, who predicted that Windows 7 would account for 75% of units shipped in 2011 and nearly 90% of all Windows desktops sold in 2012. This week, I asked Gillen whether his outlook for Windows 7 was still optimistic, based on the last year's data. There's "no change" in that level of optimism, he told me. "We are still expecting Windows 7 to be very successful."

You can take that to the bank.